CLEVELAND, Ohio — The U.S. spends $2.5 billion a year on health care.
Speaking recently to an audience of Cleveland physicians and lawyers, Dr. Ezekiel J. Emanuel, a top health care adviser to President Obama, said if we keep spending at that rate that in 75 years – that’s two generations – 50 percent of our gross domestic product will be related to health care. Only half joking, he added: “We’ll have two classes of people then, patients and doctors.”
What’s driving the costs? Emanuel, a National Insititutes of Health bioethicist and brother to Obama’s chief of staff, Rahm Emanuel, said hospital-related expenses account for one-third of our spending; doctor and clinical services for a quarter; and prescription drugs for one-tenth.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Despite our big-bucks spending, we are 50th in the world for life expectancy. And, that, added Emanuel, “is despite the fact that after 65 just about everyone in the U.S. is covered by insurance.”
The solution to the U.S. health care system’s ills isn’t to pour more money into health care — “Many nations spend much less than us and get pretty good results,” said Emanuel. He said the solution is to improve the performance of the current health care system to achieve the “holy grail of health care: higher quality, universal coverage and controlled costs.”
That tall order must be addressed on three fronts.
Front one: Root out waste. Citing four recent studies, Emanuel said between $750 billion and $785 billion health care dollars are wasted every year:
A Personalized Approach to Medication Nonadherence
At the Abarca Forward conference earlier this year, George Van Antwerp, managing director at Deloitte, discussed how social determinants of health and a personalized member experience can improve medication adherence and health outcomes.
- Excess administrative costs account for about $210 billion
- Excessively high prices for medications, devices, equipment and procedures accounts for about $105 billion
- Fraud accounts for about $75 billion
- Defensive medicine accounts for about $20 billion
- Errors, inefficient and redundant care accounts for about $400 billion.
“If we are serious about cost controls, this is where [we] can start to realize savings,” Emanuel said.
Front two:Â Reshape the physician-patient relationship (some would even call it partnership). This means moving from a high-tech medical model — “High tech has supplanted doctors’ involvement [with patients] over the last 40 years,” said Emanuel — to one incorporating both high tech and high touch.
To do that, Emanuel said we have to create “fully realized medical homes” — everything from on-site company clinics to community-based primary care practices — that provide primary care and are the portals to higher-level care. The medical home model won’t work, however, unless they are evidence- and data-driven; focused on prevention, primary care and care coordination; and provide physicians monetary and personal incentives to choose and/or remain in primary care practice.
With regard to the latter item, Emanuel noted that a major reason physicians (including him) have gone the specialist route (he’s an oncologist as well as bioethicist) is that a specialty offers physicians the chance to develop the patient-doctor relationships and orchestrate the positive patient outcomes that led most into medicine in the first place.
Front three: Focus health care and health care dollars where they will do the most good. “Ten percent of the population spends two-thirds of the dollars in the health care system,” Emanuel said.
And the vast majority of that money is spent on chronic conditions. “The biggies are congestive heart disease, chronic obstructive pulmonary disease, diabetes, coronary artery disease, hypertension and asthma,” Emanuel said. The key to caring for most people with these conditions, he added, isn’t high-tech care provided by a physician, it’s high-touch care provided by respiratory therapists, dietitians, care coordinators and other non-physician providers “that helped prevent avoidable complications.”
Can the American health care system step up to the plate? It’s going to be an uphill battle, Emanuel said.
Fewer doctors are choosing to go into primary care, so there are fewer people available to champion and implement the medical home model.
Doctors’ offices — especially in rural and low-population areas — are small, often with two or three physicians and don’t adopt or adapt well or quickly. “That takes IT and analytics and staff. Smaller practices can’t get the economies of scale to do it,” he said.
The current insurance-based, fee-for-service reimbursement system “rewards” procedures – typically done by specialists – not the coordinated care that’s at the core of high-touch medicine and that negates the need for patients to be referred to specialists.
But, stressed Emanuel, uphill doesn’t mean impossible.
All the parties involved in health care have admitted that the current “system” isn’t working, nor is it sustainable.
At the same time, all over the U.S. forward-thinking physician practices, hospitals and company on-site clinics have been using research and data — better known as evidence-based medicine — to drive innovative care provision; coordinate patient care; and implement incentives for employees and physicians that promote doctor-patient relationships; increase patient compliance with prevention activities, treatment and therapy regimens; and, with savings generated through patients’ lower health care costs, lower absenteeism, and higher productivity, improve doctors’, hospitals’ and companies’ bottom lines, too.
[Photo courtesy of Wikimedia Commons]
